I’ve spent time in south Arkansas selling new technologies, lab testing and products to the oil field and aerospace companies, so I’m grinning with Arkansas pride that a new energy storage material — lithium — could improve the state and even the world.
Lithium is the new efficient energy to store solar- and wind-generated electricity in your house. Lithium batteries are more efficient and lighter than typical batteries, thus they will improve electric cars just like they improved cell phones. ExxonMobil thinks Arkansas contains 4 million tons of lithium that could create batteries for 50 million electric vehicles (EVs). Let that sink in.
Historically, lithium was derived from various brine and ore sources. The old-school processes of strip mines or evaporation of large pools of brine water typically threaten the environment to varying degrees. The typical evaporation pools require 18 months to process and extract the lithium, thus the process cannot respond to moderate demand increases. Environmental issues have limited most projects and processes because of the unknown impacts of these new greenfield projects. Recently, an environmentally friendly process has emerged that utilizes brine from wells to extract lithium.
The new brine well-based process is how Arkansas becomes a major player in lithium. We are the global leader in bromine production, which is related to south Arkansas’ oil and gas wells. The 100-year-old Smackover formation has existing oil, gas and brine/bromine infrastructure that is going to be used to energize the lithium boom. Arkansas has an existing system of wells and pipelines for bromine that are a known quantity and proven. Since the 1950s, Arkansas companies have developed protocols and systems to protect the environment from bromine production.
Arkansas could change our nation’s energy dependency. About 95 percent of the world’s lithium comes from Australia, Chile, China and Argentina. The National Renewable Energy Laboratory (NREL) says only 1 percent of the lithium used in the United States currently comes from a domestic source (a lithium brine operation in Nevada).
The legitimacy of the boom appears to be confirmed now that ExxonMobil has joined Standard Lithium (SLI) and Tetra in announcing projects in El Dorado and Magnolia. SLI’s Southwest Project alone is estimated to have total capital expenditures of $1.3 billion. SLI is ahead of the pack by validating a proprietary process of direct lithium extraction (DLE) and should be first to reach commercialization. SLI has 150,000 acres of leases, a Koch Industries technology license and the Lanxess agreement and the top bromine field in the world. Lanxess Corp. owns Arkansas’ largest brine processing facilities, and the agreement enables SLI to reduce risk by using existing permitted processing infrastructure to fast-track commercialization.
Tetra Technologies announced plans to build a $500 million lithium production facility. It is not unreasonable to expect Exxon to spend as much as SLI for capital expenditures. The main players are already connected in various ways. First ExxonMobil paid $100 million for 120,000 acres of leases in the Smackover play. Then it joined Tetra to develop more than 6,100 acres in Arkansas. Tetra had already leased more than 27,000 acres in Arkansas to Standard Lithium and also is working with Saltwerx, a subsidiary of ExxonMobil. The SLI connectivity continues as Tetra currently buys bromine from SLI partner Lanxess.
Furthermore, Standard Lithium has proven two concepts of direct lithium extraction in Arkansas — SLI’s proprietary LiSTR process and a co-developed process with Koch Technology Solutions (KTS). The Lithium Selective Sorption (LSS) process is the product of the SLI-KTS collaboration, and Standard Lithium has regional exclusivity for the LSS process in the Smackover formation. SLI’s feasibility study of the production process will conclude in 2024, with construction commencing in 2025 and first production expected in 2027.
The SLI process starts with “brine entering the production facility to be pre-treated and then processed via the co-developed Koch Technology Solutions’ LSS direct lithium extraction process. After purification and concentration, final conversion to a lithium hydroxide product would use a modified chlor-alkali electrolysis process. After lithium extraction, the lithium-depleted brine will be returned to the resource area by a pipeline system to the network of brine injection wells.”
Spin-off initiatives
The new technology-induced lithium boom in Arkansas could spin off initiatives that create diverse values. We can increase the value for south Arkansas with the addition of battery manufacturing facilities for the likes of Tesla, EnerSys, Romeo Power, Clarios, A123 Systems, Microvast, Lithion, etc. Manufacturing of mobile phone batteries account for a large portion of revenue for many companies. The manufacturing facilities are not always capable of running large batteries on the same production lines as the small batteries used for consumer electronics. Therefore, these companies may need to expand their facilities or build new facilities to produce battery “walls” for homes or batteries for EVs cars.
We can increase value with geothermal power from bromine wells that are twice as deep as average Arkansas oil wells with temperatures around 250 degrees Fahrenheit or more. We have numerous wells in Arkansas at 20,000-plus feet that could produce enough heat for electricity generation. Bromine-rich brines are typically recovered around 7,000 feet in the Smackover formation and still reach the surface at around 212 degrees. An experimental geothermal energy-recovery plant was built near El Dorado in the late 1970s to investigate the usage of waste geothermal brine from the Great Lakes Chemical Corp. for electrical power production. It is entirely possible that deeper wells and new technologies have emerged during the last 40 years to improve heat conversion.
Geothermal could make the Arkansas lithium zone as green as possible and provide revenues that reduce risk. Per the U.S. Department of Energy (DOE), geothermal brines beneath the Salton Sea in southern California are a domestic lithium source, but low lithium productivity and environmental concerns limit the potential. The Salton Sea’s commercial risk is reduced by 11 geothermal power plants generating green electricity.
The limiting factor for geothermal has been high upfront costs for drilling wells that may not be hot enough. Arkansas already has thousands of wells that negate the upfront costs, and we know which wells are hot enough. Data from the U.S. Greenhouse Gas Emissions and Sinks (GHGI) for abandoned oil and gas well activity shows the U.S. had about 2.2 million abandoned wells in the 2021 GHGI inventory.
Geothermal is green enough that the DOE Geothermal Technologies Office is investing in abandoned wells or co-production via its Wells of Opportunity initiative. Abandoned oil and gas wells need to be deep enough to heat water; active oil and gas wells often encounter extremely hot water, and co-production captures that heat to generate electricity.
Future considerations
The Murphy family deserves tremendous respect for what it has done to change El Dorado. The downtown has become cool for a small Southern town thanks to the Murphy Arts District, Haywood Hotel, restaurants, concerts, oil history displays, etc. Downtown El Dorado has become a cool environment with a great quality of life that is unique to the city. El Dorado’s upward trend comes at an opportune time to provide the best base camp for the energy companies investing in south Arkansas. El Dorado is nice enough that the execs and their expense accounts will flock to the area and the Haywood Hotel.
With all those acres of leases, the Lanxess agreement and the top bromine field in the world, SLI projects should commercialize faster, reducing upfront costs and providing more competitive market-entry pricing. SLI’s early revenues should enable evergreen financing or at least attract better investment and financing. Could the rural electric co-ops in Arkansas collaborate with the lithium producers to create electricity via geothermal energy?
ExxonMobil has budgeted $17 billion through 2027 to invest in technologies for low-carbon emissions and develop low-carbon technologies. What is its next move after spending $100 million on leased acreage? When does Exxon announce construction of a production site? On the other hand, does it use some of its large budget to buy SLI and get a turnkey production infrastructure, enabling it to get on the market first? Does Exxon see the value of the Lanxess agreement to use existing permitted wells, the co-developed IP and the Koch corporate name to de-risk investment?
Plus, the landowner in the lithium zone is going to benefit too. Lawyers in south Arkansas are going to be busy helping landowners benefit from the lithium boom via the Strohacker Doctrine. Arkansas oil and gas laws on file at the University of Arkansas at Little Rock documents Strohacker, which legally enabled mineral deeds: “…. the intention of the grantor should be ascertained by reference to ‘substances commonly recognized as minerals’ at the time of the conveyance.” The doctrine enabled landowners to get royalties for bromine after its discovery in the 1950s. It should apply to lithium, as well, and that is what lawyers will litigate.
History does repeat itself. Smackover was put on the map in 1922 when a wildcatter hit oil without geological engineering or seismology. The Union County town was nationally known for oil, but the best was yet to come with a new technology. In 1936, exploration teams using new seismic-enhanced technology discovered a great oil and gas formation that came to be known as the Smackover Formation. Today, the formation isn’t as productive as it was, but another new technology is going to resurrect the Smackover formation for round 3.
Brian Umberson is a native Arkansan who has worked with startups in the fields of biotech diagnostics, foodborne pathogens, oil and gas microbes, medical devices and diagnostics, as well as the automotive, steel and aerospace segments. A National Science Foundation I-Corps mentor, he works with the Arkansas Association for Food Protection, the International Avian Influenza Summit and Bio+Nano+Ark.
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